Philanthropy outlook upbeat, but not for religious charities

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Philanthropy does not seem to have been hit by the global economic downturn. Contrary to some initial fears after the stock market plunge last year, giving by the rich to charitable causes seems to be rising as younger donors get more active in the field. But the report by Barclays Wealth, the wealth management arm of the British bank, says faith-based charities face falling donations because they’re not in step with this new generation of philanthropists.

(Photo: donation box in London Oxfam shop, 2 Dec 2008/Simon Newman)

The report, entitled Tomorrow’s Philanthropist, is upbeat about charitable giving based on the bank’s survey of 500 “high net worth investors in the UK and US.” As it said in a summary of the report: “Despite the global downturn, three quarters (75 per cent) have not decreased their contributions, whilst more than one in four (26 per cent) have increased their giving in the last 18 months.”Buried in the report is a sobering angle for churches and religious charities: “The future is less certain for the traditional recipients of charitable donations, such as the arts and religious organisations. On balance, high net worth donors stated that these causes had become less important to them over the past ten years, and that this trend would accelerate over the next decade if the causes in question failed to engage in a meaningful way with the next generation of givers.”In a report graphic, religious charity seems set for the biggest reduction in donations, -16%, while health and medical charities should see a +58% rise in gifts. The other losers are the arts (-14%) and animal causes (-6%) while the number two and three growth leaders are children (+41%) and environment (+35%).These results could be skewed by the sample group that Barclays Wealth used. The report did not analyse the expected drop in faith-linked donations any further, so it’s not clear whether a wider survey of donors below the report’s rarified donor group might show better support for religious charities.Do any readers have recent information about how religious charities are doing in the downturn? (UPDATE: please read the first comment below for more information on this)Here is the PDF file of the report and Barclay Wealth’s summary of it. Below is a short video on it by Hayley Platt of Reuters Television. Since video clips are short and reports like this long, the report’s main points are copied below the video.The report’s main points are:• We are at the beginning of a new age of philanthropy – A new breed of wealthy philanthropists is emerging who are more socially aware and more motivated to give back to the communities they came from, as well as global causes.• The wealthy are still giving despite the downturn – The recession has failed to dampen philanthropic spirit; the commitment of those who already give will remain resolute, and some wealthy individuals are actually increasing the levels of their funding in order to ensure that their charitable goals are met.• The wealthy will play an increasingly important role, compared to governments, in funding welfare projects – The recession will potentially increase the role of the wealthy philanthropist on a broad basis, as governments around the world become more constrained in the causes they can fund. High net worth givers will become an invaluable source of innovation and investment for charities.• The wealthy prefer to fund projects directly – Respondents increasingly feel that they can make a bigger impact and drive change more effectively by giving directly to charities, rather than supporting causes indirectly through taxation.• High net worth donors are becoming increasingly active philanthropists and now seek to solve rather than simply to support – Historically, high net worth individuals have donated money and time to charities to support their endeavours. Now, however, the wealthy are far more ambitious in their philanthropic aims and are wanting to see visible or measurable change.• The worlds of charity and business are converging – Smaller, nimbler and more accountable charities are becoming increasingly attractive to donors compared to the large, traditional charities. This will have a knock-on effect and in the future, we will see the emergence of more commercial ventures which have a philanthropic aim at their core.

The results of this study are out of line with most of the research about giving to religious causes. For example, the 2009 trend report from the Giving USA Foundation includes the fact that religious organizations in the U.S. reported a 5.5 percent increase in donations last year, the first year in a long time that there was a decline in overall charitable giving (down 2 percent). The March 19 (2009) issue of Philanthropy Journal includes a report from the Evangelical Council for Financial Accountability that donations to three quarters of its member organizations held steady or increased in the last quarter of 2008. The Wall Street Journal of May 24 (2009) quotes the Center on Philanthropy at Indiana University that in a recession “giving to education and the arts are typically hit hardest, while … religious organizations feel little impact.”How did the Barclays-sponsored study come up with such a different finding? Two explanations come immediately to mind: (1) The study includes both British and American respondents. Attitudes about both giving and religion are much different in the U.K. than they are in America and this particular finding about religion may be driven more by the U.K. respondents than the American. (2) The sample for the Barclays study is, by definition, taken entirely from among the wealthy. The report from the Evangelical Council for Financial Accountability notes that “small donations of $10 to $100 were relatively unaffected and in some cases … increased.” The Barclay’s study may reflect the attitudes toward religion on the part of the relatively few wealthy donors and not that of the general population of givers.

Monte Sahlin, many thanks for this very interesting comment. You give the balance I was looking for but didn’t have the info to hand. It makes a lot more sense that religious donations have a much wider base with lower contributions that the big-ticket charity giving they’re talking about here. Having British donors in the sample also has to skew the results. I hope anyone who reads my post follows through and reads your comment too. I’ll flag that in the post.

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As Religion Editor based in Paris, I cover main religion developments, coordinate religion news coverage and run the FaithWorld blog. Since joining Reuters in 1977 in London, I've worked in Vienna, Geneva, Islamabad, Bangkok, Hong Kong, Bonn and Paris. My book Unchained Eagle: Germany after the Wall was published in 2000. In 2006, I received the European Religion Writer of the Year award and FaithWorld was awarded the RNA 2012 Best Online Section prize.